As the United States approaches its presidential election on Tuesday, November 5, 2024, the Bitcoin market is bracing for significant volatility. In the lead-up to the election, Bitcoin surged to a high of $73,620 on Tuesday, likely reflecting investor optimism over a potential victory for former President Donald Trump. However, by Friday, the BTC price experienced a correction, dipping to $68,830 amid a more cautious, risk-off sentiment as the election looms.
How To Trade Bitcoin During US ElectionAlex KrĂźger, an Argentine economist and renowned crypto analyst, shared his strategic framework on how to trade Bitcoin during the US election period via his X account. KrĂźger outlined scenarios based on possible election outcomes, highlighting that a Trump victory could propel Bitcoin to $90,000 by year-end with a 55% probability, while a win for Vice President Kamala Harris might see Bitcoin settle around $65,000 with a 45% probability. He emphasized that timing will matter: âExpect the move to be fast if Trump wins. Markets rarely waits for laggards on binary events not largely front-run.â
KrĂźger also noted that the current Bitcoin price, which he anticipated to be in the $65k-68k range leading up to election night, had âovershotâ in alignment with the probabilities favoring a Trump victory. He pointed out the uncertainty surrounding the election results, primarily hinging on the Pennsylvania vote count, which could delay the announcement of a clear winner.
âIt largely depends on the Pennsylvania count, if it is lopsided or not. It could be as early as Tuesday evening EST, or days later if the count is very tight. The sooner we get clarity, the easier it gets,â KrĂźger stated.
Regarding market sentiment, KrĂźger expressed a bullish outlook on equities regardless of the election outcome, unless there is an unexpected âBlue sweepâ where Democrats secure both the presidency and congressional majorities. He explained that âequities drag Bitcoin around.â
In his personal investment strategy, KrĂźger revealed that he is positioned with long spots in Bitcoin and Nvidia, and plans to go long on Solana (SOL) if Trump wins. With this, KrĂźger is likely betting on a spot Solana Exchange Traded Fund (ETF) approval in the United States.
KrĂźgerâs analysis suggests that the market has partially priced in a Trump victory, anticipating that a Trump administration could bolster the Bitcoin price. âMarkets have partially priced a Trump victory in. We (the market, in aggregate) expect Trump to drive crypto prices higher due to increased regulatory clarity and implementation of pro-crypto policies,â the analyst wrote.
Additionally, he expects that Trumpâs focus on increased government spending would stimulate short-term economic growth, positively impacting equitiesâa sector closely linked to Bitcoinâs performance.
Conversely, a Harris victory would likely represent a continuation of existing policies, barring a significant Democratic sweep. KrĂźger concluded: âBased on betting markets and various election forecasting models, Trumpâs probabilities are in the 50% to 63% range. Ergo, itâs âsafeâ to assume a GOP victory is far from being fully priced in. Such a contested setup is common going into elections. That is why I do not expect âsell the newsâ.â
At press time, BTC traded at $70,402.